After failed tax, Munroe officials discuss leasing

Published: Sunday, November 11, 2012 at 5:23 p.m.

Last Modified: Sunday, November 11, 2012 at 5:23 p.m.

Executives and board members at Munroe Regional Medical Center say voters’ rejection of a hospital tax last week strengthens the argument for leasing the public hospital to a private company, and soon.

Voters on Tuesday overwhelmingly opposed the tax, which would have raised $65 million to make improvements at the hospital and halt its slide into red ink.

A different option, supported by opponents of the tax, was to lease or sell Munroe to a private company that could, perhaps, keep it financially solvent. Supporters of the tax fear that a private hospital company would simply cut essential services and degrade the quality of a medical center that has been acknowledged as one of the best of its size in the nation.

But even tax supporters characterize Tuesday’s anti-tax vote — more than 57 percent of voters opposed it — as a clear mandate by the citizens and acknowledge that leasing the hospital seems inevitable.

Munroe CEO Steve Purves said Friday that the trustees who oversee the public hospital will meet on Wednesday to continue that process, which had been stalled until the outcome of the tax vote became clear.

“The public has spoken, and so our trustees have to do what they have to do,” he said.

Purves noted that while the hospital is financially sound at the moment, it won’t be so for long. Because it is a public hospital, Munroe struggles with a large number of poor patients who cannot afford to pay or who pay very little.

Purves believes that if the trustees are going to lease the hospital, they need to do it soon, before Munroe’s financial picture worsens and no private company wants to run it. That could happen by September 2013, at the earliest, he said.

“The reality is that a standalone health care facility is not sustainable long term,” he said. “I, myself, think our model is not sustainable. The status quo is not an option.”

Dr. Michael Jordan, who serves on the hospital’s board of trustees, agrees.

“At this point, I don’t see any other solutions,” Jordan said. “I think there could be a lot of opposition if we kind of play around and try to weasel out (of leasing the hospital). Two options were put out there, a tax and a lease. People said they didn’t want the tax, and that leaves us with a lease.

“This is democracy in action,” he added. “This is the public’s hospital. They had a right to make the decision, and they rejected the idea of a tax to support it, and I think there is something beautiful about that.”

Jordan admitted, however, being somewhat dispirited by the vote.

“I’m afraid we live in a community that is too heavily focused on no taxes, to the exclusion of decent roads, decent schools and decent services,” he said.

Stan Hanson, a former hospital board member who led a well-funded campaign to support the tax, believes a number of factors worked against the referendum.

An obvious factor was the poor economy, which has made people averse to taxes in general. He also believes the proposed property tax was less palatable to voters than a sales tax would have been, although a sales tax was ruled out because it wouldn’t have raised enough money for the hospital.

And he noted that retirees who live in south Marion County near The Villages rejected the tax by a 2-1 margin because they live close to a hospital in The Villages.

Hanson, like some other Munroe supporters, believes any private company hired to run Munroe will have to cut essential services and impact the quality in order to maintain profitability. He said Munroe could do that itself, without leasing its operations to an out-of-town firm and losing local control.

“If you have to stop delivering babies, so be it,” he said. “You can start operating under a for-profit model, and if the community becomes concerned about the loss of services, they can complain to the trustees, and they can re-evaluate what they want to do.”

Purves, the Munroe CEO, disagrees.

“I think eliminating needed services without at least trying to maintain them through an innovative partnership with another entity is probably irresponsible toward the general public,” he said.

Jon Kurtz, who serves as chairman of the board of trustees, was guarded in his assessment of whether Munroe would ultimately be leased to a private company.

“We’ve started a process to find capital, and we will continue the process and see where it goes,” Kurtz said.

Like the other trustees, he acknowledged that, whatever happens, Munroe cannot continue to operate as it has in the past.

“I think we’ve had many, many people look at it, consultants and such, who say that the wave with public hospitals is toward consolidation and partnerships,” he said.

<p>Executives and board members at Munroe Regional Medical Center say voters' rejection of a hospital tax last week strengthens the argument for leasing the public hospital to a private company, and soon.</p><p>Voters on Tuesday overwhelmingly opposed the tax, which would have raised $65 million to make improvements at the hospital and halt its slide into red ink.</p><p>A different option, supported by opponents of the tax, was to lease or sell Munroe to a private company that could, perhaps, keep it financially solvent. Supporters of the tax fear that a private hospital company would simply cut essential services and degrade the quality of a medical center that has been acknowledged as one of the best of its size in the nation.</p><p>But even tax supporters characterize Tuesday's anti-tax vote — more than 57 percent of voters opposed it — as a clear mandate by the citizens and acknowledge that leasing the hospital seems inevitable.</p><p>Munroe CEO Steve Purves said Friday that the trustees who oversee the public hospital will meet on Wednesday to continue that process, which had been stalled until the outcome of the tax vote became clear.</p><p>“The public has spoken, and so our trustees have to do what they have to do,” he said.</p><p>Purves noted that while the hospital is financially sound at the moment, it won't be so for long. Because it is a public hospital, Munroe struggles with a large number of poor patients who cannot afford to pay or who pay very little.</p><p>Purves believes that if the trustees are going to lease the hospital, they need to do it soon, before Munroe's financial picture worsens and no private company wants to run it. That could happen by September 2013, at the earliest, he said.</p><p>“The reality is that a standalone health care facility is not sustainable long term,” he said. “I, myself, think our model is not sustainable. The status quo is not an option.”</p><p>Dr. Michael Jordan, who serves on the hospital's board of trustees, agrees.</p><p>“At this point, I don't see any other solutions,” Jordan said. “I think there could be a lot of opposition if we kind of play around and try to weasel out (of leasing the hospital). Two options were put out there, a tax and a lease. People said they didn't want the tax, and that leaves us with a lease.</p><p>“This is democracy in action,” he added. “This is the public's hospital. They had a right to make the decision, and they rejected the idea of a tax to support it, and I think there is something beautiful about that.”</p><p>Jordan admitted, however, being somewhat dispirited by the vote.</p><p>“I'm afraid we live in a community that is too heavily focused on no taxes, to the exclusion of decent roads, decent schools and decent services,” he said.</p><p>Stan Hanson, a former hospital board member who led a well-funded campaign to support the tax, believes a number of factors worked against the referendum.</p><p>An obvious factor was the poor economy, which has made people averse to taxes in general. He also believes the proposed property tax was less palatable to voters than a sales tax would have been, although a sales tax was ruled out because it wouldn't have raised enough money for the hospital.</p><p>And he noted that retirees who live in south Marion County near The Villages rejected the tax by a 2-1 margin because they live close to a hospital in The Villages.</p><p>Hanson, like some other Munroe supporters, believes any private company hired to run Munroe will have to cut essential services and impact the quality in order to maintain profitability. He said Munroe could do that itself, without leasing its operations to an out-of-town firm and losing local control.</p><p>“If you have to stop delivering babies, so be it,” he said. “You can start operating under a for-profit model, and if the community becomes concerned about the loss of services, they can complain to the trustees, and they can re-evaluate what they want to do.”</p><p>Purves, the Munroe CEO, disagrees.</p><p>“I think eliminating needed services without at least trying to maintain them through an innovative partnership with another entity is probably irresponsible toward the general public,” he said.</p><p>Jon Kurtz, who serves as chairman of the board of trustees, was guarded in his assessment of whether Munroe would ultimately be leased to a private company.</p><p>“We've started a process to find capital, and we will continue the process and see where it goes,” Kurtz said.</p><p>Like the other trustees, he acknowledged that, whatever happens, Munroe cannot continue to operate as it has in the past.</p><p>“I think we've had many, many people look at it, consultants and such, who say that the wave with public hospitals is toward consolidation and partnerships,” he said.</p>